The Crypto Fear & Greed Index has plunged back to 5 out of 100, one of its lowest readings since the metric was introduced in 2018.
To put that into perspective:
The index has only reached this level 3 times in its history.
A score of 5 signals ‘extreme fear’ reflecting widespread panic and capitulation among market participants.
Such readings often coincide with heightened volatility and forced liquidations and this time was no different.
According to derivatives data, more than 136,000 traders were liquidated over the past day.
Total liquidations: ~$458 million
Long positions: 92% of liquidations
Short positions: Just 8%
This imbalance shows that the majority of traders were positioned for upside continuation after the weekend rally and were caught off guard by the reversal.
Heavy long liquidations typically accelerate downside moves as forced selling compounds the drop.
While Bitcoin briefly reclaimed momentum over the weekend, it remains significantly below its October 2025 all-time high of $126,000.
At current levels:
BTC is down approximately 48% from its all-time high
It is also trading about 5.5% below its 2021 peak near $69,000
This highlights the broader macro drawdown still in play despite intermittent relief rallies.
On-chain analytics paint an equally sobering picture.
The 7-day moving average of net realized losses among recent investors remains near $500 million per day indicating that a significant number of holders are exiting positions at a loss.
Meanwhile, Bitcoin’s Sharpe Ratio, which measures risk-adjusted returns, has dropped to around –38, one of the weakest readings on record. A deeply negative Sharpe Ratio reflects poor recent performance relative to volatility, underscoring the heightened risk environment.
Taken together, the statistics suggest:
Sentiment has returned to panic territory
Leverage remains a key driver of short-term volatility
Realized losses are still elevated
Price remains structurally far from previous highs
Extreme fear readings have historically preceded local bottoms but they have also appeared during prolonged bear phases.
For now, the data shows a market still grappling with volatility, deleveraging and shaken confidence, even as long-term narratives remain intact.
MARKET ANALYSIS | Here Are 3 Theories Behind Bitcoin’s Fall 50% Below All-Time High
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